So we don't have a lot of faith in certain investors being able to commit capital. Some give their word and back out. We are thinking we just buy properties with own funds and then sell stakes to investors. For example, we buy an apartment complex at a $15 million valuation. We own 100%. We then later sell 75% stake to various investors at a $18 million valuation. I know there are JV structures, where one company will buy a stake, but its usually for massive properties and usually only two parties are involved. What if I wanted to sell to individual investors? Anyone familiar with this and and tax/legal implications? I imagine it can get quite confusing.
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I've seen it done on development deals. GP buys the land and then sells themselves 100% out of the deal and collects an egregious promote. Can't speak to the technical details of it though.
how would that be considered promote? isn't it just a gain on an investment?
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